Lease Delays Cost Govt Rental Revenue From Highway Concessionaires

Delays in finalising land lease agreements have cost the government thousands in uncollected rental revenue from highway concessionaires, according to the Auditor-General’s Report 3/2025.

The report revealed that 96 administrative offices belonging to highway concessionaire companies across Peninsular Malaysia have yet to sign lease agreements with the government despite some having occupied the premises for as long as 26 years.

As reported by Bernama, the delays have resulted in RM96,000 in lease revenue remaining uncollected.

"27 concessionaire companies managing 33 highways are involved in the leasing process, which falls under the jurisdiction of the Works Ministry and the Director-General of Lands and Mines (JKPTG)

"As of December 31, 2024, a total of 136 administrative offices had been built by concessionaire firms, but 96 offices from 23 of these companies still lacked formal lease agreements," the report stated.

According to the audit, the main cause of the delay stems from land ownership procedures with 25 applications still pending with the Malaysian Highway Authority (LLM) and the Works Ministry, and eight cases awaiting processing at ministerial and JKPTG levels.

It also pointed out that six administrative offices under the Shah Alam Expressway (KESAS) were not subject to any lease clause in their concession agreements, meaning no lease payments were charged to the company.

"Between 2005 and 2024, LLM collected RM3.27 million in lease payments from 27 offices across 10 highways before formal lease agreements were signed," the report noted, adding that the agency had no legal authority to do so.

To address the issue, the Auditor-General recommended that concessionaire companies expedite land ownership applications through the ministry, LLM, and JKPTG, and that authorities amend the KESAS concession agreement to include a lease clause and enable proper rental collection.